In spite of pandemic fears, the housing market is healthy according to Freddie Mac's Primary Mortgage Market Survey (PMMS) for the week ending March 5. Freddie's analysts summed up last week's activity saying, "The average 30-year fixed-rate mortgage (FRM) hit the lowest level in its nearly 50-year history. Given these strong indicators in rates and sales, as well as recent increases in new construction, it’s clear the housing market continues to be a positive force for the broader economy."
Consumers may be confused by what they're hearing and seeing about mortgage rates. In spite of news that 30-year FRM rates dropped to the low three-percent levels last week, available rates are showing much higher on multiple real estate and lending comparison sites. The contradiction in news reports and advertised rates is likely an effort to curb the rush to refinance as lenders struggle with the ability to service and fund demand.
SLIP VS. SLIDE
Consumer confidence in housing remains near all-time highs according to Fannie Mae's latest Home Purchase Sentiment Index®. The monthly survey showed a slight dip in February numbers, but revealed that "American consumers’ optimism about the direction of the economy is higher [ ] than at any point in the survey’s nearly ten-year history." Fannie Mae's Chief Economist Doug Duncan cautioned that "the late February stock market decline [ ] is not fully reflected in this month’s results due to the timing of our survey data collection."
January existing home sales were up 9.6% year-over-year, according to the latest Existing Home Sales (EHS) report from the National Association of Realtors®(NAR). The EHS numbers also showed a 6.8% increase in median home prices from January 2019, marking their 95th straight month of y-o-y gains.
Sources: Freddie Mac, Zillow, Bankrate.com, Fannie Mae, National Association of Realtors®
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